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You must add one of the two following investments to an already well-diversified portfolio. Stock A Stock B Expected Return 14% 16% Standard Deviation 12%

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You must add one of the two following investments to an already well-diversified portfolio. Stock A Stock B Expected Return 14% 16% Standard Deviation 12% 14.5% Beta 1.8 1.8 If you are a risk-averse investor, which one is the better choice? Stock B Either stock would be acceptable It depends on the return on the market portfolio Cannot be determined with information given Stock A

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